Russell Cohen

Stock Versus Asset Acquisitions

Stock Versus Asset Acquisitions

May 2015

One Should always consult there accountant on these matters, however, from a lenders standpoint both forms of sales are acceptable. As a buyer, you should be aware that in a stock sale, you may be resposible for prior sins of the corporation you are buying. Your attorney can assist with language, rights of offset against seller notes and other defenses against some of these risks.

Also, under the stock sale, assets are valued based on their book value, which is often less than the replacement or market value. A separate appraisal may be rquired to address this discrepancy in value as a means to provide the maximum financing. In an asset sale, many of our lenders will use the asset values as agreed to between buyer and seller, regardless of their book value, which negates the requirement of a costly appraisal